Guinea's Simandou's Dilemma - the better way forward

In my previous article “Guinea’s Simandou Dilemma”, I examined potential landscape and cultural heritage impacts in developing Guinea’s globally-important iron ore region.

In this wide-ranging follow-up, I illustrate the main technical challenges that have stifled Simandou’s development for the last 23 years, discuss the socio-economic risk of massive internal migration that would be triggered by the mega-project, and advocate a collaborative regional development policy as the better way forward for the Simandou mega-project.   

The Stifled Development - 1997 to 2020

A few weeks ago I read an interesting quote in the Australian Financial Review:

''... the probability of zero (iron ore) production from Guinea is diminishing but is still material. The myriad risks that have stifled development in the past still exist.''

The quote is by CRU lead iron ore analyst Andrew Gadd. Andrew has got it right. The probability of zero production has diminished considerably, but the myriad risks that have stifled Guinea's Simandou iron ore region for the last 23 years still exist.

The Simandou story began in 1997 when Rio Tinto was awarded four large concessions. In 2008, after the project development had been stymied by contentious twists and turns under Guinea's then autocratic government, Rio Tinto lost two of them.

In 2010, the West African country began a transition to democracy. Alpha Condé, an opposition activist who had spent decades advocating democracy and transparency, won the first open and free presidential election since the country's independence from France in 1958. He immediately embarked on reforms of the country’s financial and mineral governance regimes to promote a business friendly environment. In 2018, the US Agency for International Development described the President's reforms as...

“...dramatic improvements in macroeconomic governance and public financial management since the transition to democratic rule in December 2010”.  

The GDP per capita trend between 2010 and 2018 reflected this. 

Chart: Data from World Bank, chart by the author

Was this good news for everyone? An increase in GDP per capita does not mean that all Guineans saw an improvement in their daily lives. In 2018, despite the dramatic improvements in governance and a surge in Government revenue from bauxite mining, over 65% of Guineans still lived in poverty. President Condé’s critics maintained that benefits from his reforms had not trickled down to ground level, that the health and prosperity of the vast majority of citizens had not changed since 2010. In the mining regions, some critics argued, socio-economic conditions had worsened.

During the recent 2020 presidential election, President Condé pledged that prosperity from mining, Simandou in particular, would be shared more widely. He was re-elected in mid-October for a controversial third term. Now he has to deliver at ground level to secure his legacy. The problem the president faces is that the myriad commercial and technical challenges that have stifled Simandou's development since 1997 remain. They are not insurmountable but they are extremely daunting - let’s examine them to understand why. 

Geography

The first challenge is Simandou's location.

There are four Simandou concessions. Blocks 1 and 2 (Simandou North) are controlled by the Winning Consortium, a consortium of Guinean, Singaporean, and Chinese companies. Blocks 3 and 4 (Simandou South) remain with Rio Tinto and its partner Chinalco. The Government of Guinea has a stake in both projects. The blocks are located deep in the landlocked part of southeast Guinea, on the N’Zérékoré and Faranah prefecture border.

Map above: Simandou North (in red) and Simandou South (in yellow). Data from Ministry of Mines & Geology's online cadastral concession database, background map by Google Earth

Accessing a port on the nearest coastline would mean crossing Sierra Leone or Liberia. The Guinea Government mandated that Simandou iron ore must be exported through a port located in the country. A railway to the south is politically unthinkable. The only solution is to traverse across the country westwards to the coastline of Forécariah prefecture.  In 2012, Rio Tinto proposed a railway from its Simandou South concession to a port south of the capital Conakry.  

Map above: Rail alignment from Simfer SA's SEIA 2012, background map by Google Earth

Approximately 670 kilometres long, the railway included 20 kilometres of tunnels. It required resettlement for hundreds of households and a compensation program for the thousands of subsistence farmers whose access to land would be affected.   

The railway terminated at an ore dumping facility on the Forécariah coastline. The Guinea coast is very shallow so an 11-kilometre-long pier and conveyor system was proposed to load ore ships.  The deep drafts of fully loaded iron ore ships would have required extensive dredging of a long channel from the four berths at the end of the pier out to deep water. 

Map above: Rail and pier alignment from Simfer SA's SEIA 2012, background map by Google Earth

The estimated capex budget for this mine, port and rail configuration was approximately US$20 billion, a figure so indigestible that by 2016 it forced Rio Tinto to suspend project development.

Everything changed in 2019. SMB Winning, the consortium that had radically changed the bauxite industry and put Guinea into the top tier of suppliers, was awarded the Simandou North concession after a competitive tender. SMB Winning incorporated the Winning Consortium as a separate iron ore entity, which signed a mining development agreement with the Government in June 2020 and committed to first production in 2025. The arrival of an ambitious competitor spurred Rio Tinto into reviewing its 2012 project configuration and look for cost optimizations. 

Optimizing the costs of the railway and ports

Optimizing the costs of the railway and port configurations will be foremost in the minds of executives in both companies. Rio Tinto can now share the burden of building and operating the railway with the Winning Consortium. They are signalling to each other that they are willing to do so but there are no public signs yet of substantial negotiations.

This is not entirely surprising. No mining company wants to share operational control over its logistical supply chain, especially with a competitor. This is perfectly illustrated at the Pilbara iron ore region in north west Australia. 

Map above by Peter Christener, Wikipedia

Four mining companies, including Rio Tinto, have each built their own railway. Three of them share a corridor to the coastline and terminate at co-located deep-water ports at Port Hedland. Rio Tinto has an extensive rail network that terminates at two deep water ports, one at Dampier and the other at Cape Lambert.  

Winning and Rio Tinto would probably prefer a Pilbara-style configuration, each having full operational control over its own rail system. But the difficult geography and distance from concessions to coast makes this unlikely. They will have to negotiate a complex multi-user rail agreement and presumably co-locate their ports. 

If a multi-user rail and co-located ports is the way forward, then there is another cost optimization opportunity. In January 2020, at the UK-Africa Investment Summit, the Guinea Government signed a memorandum of understanding with bauxite mining company Anglo African Minerals, a move encouraged by the UK Government. AAM intends developing a railway in the central corridor between Mamou and the same area in Forécariah where the iron ore ports could be located. A multi-user railway shared between all three mining companies between Mamou and three co-located ports could further optimize the cost of the infrastructure. 

The pier is also an expensive item, particularly the dredging required to construct and maintain a navigable channel. An option may be to minimise dredging by using a transshipment loading process. SMB Winning already uses transshipment for its bauxite operations in north west Guinea. Transshipment technology has improved significantly since 2012, and both companies will be looking at this. A third option is a deep water port which will be expensive. In any case, pier loading, transshipment or a deep water port will all require dredging, so the companies will probably need to co-locate their ports, as per Pilbara's Port Hedland.

An optimal railway and port configuration that meets all commercial and technical constraints seems far from being resolved though. Will the rail costs be shared? How will the capex and opex of the rail and port works be split? Who will be the railway users? Will it have capacity to provide access to the central Guinea bauxite mines? Can construction and operation of the rail be outsourced to a third party? If so, who will own it? Will the ports be co-located? Is there an alternative to a long pier and dredged channel, transshipment for example ?

All of these variables need resolution before cost optimization can be finalised. This may take some time. For instance, bauxite mining companies CBG, GAC and COBAD took three years just to negotiate a multi-user railway and upgrading agreement for the existing 125-kilometre Sangarédi network.

The politics of a railway 

The next challenge emerges from the aftermath of the 2020 Guinean presidential election.

As president, Alpha Condé has been consistent in mandating that the railway corridor must be in Guinea. It is perfectly understandable. A railway corridor will be a catalyst that will unlock the otherwise stranded economic potential in central Guinea. President Condé made this clear to his supporters in Mamou in mid-October 2020, before the election:

"Guinea is moving forward...most important is the mine of Simandou. The company has started work. They are going to make a train that will leave from Kérouané, Beyla, N’Zérékoré, Macenta, Guéckédou, Kissidougou, Faranah, Mamou and Forécariah. This train will transport minerals, goods and (passengers).

He then went on to say:

And we asked (the mining companies) to move forward to give us the Conakry-Mamou-Kankan-Mandiana-Bobo Dioulasso (in Burkina Faso) railway”.

The president's public reference to a Mamou-Kankan line that can carry goods and passengers has significant political importance. There used to be a railway that connected Conakry to Mamou and Kankan. Unfortunately, the Mamou to Kankan section fell into disuse and today nothing remains today except the overgrown alignment. Expectations have been raised for years. The previous concession holder of Blocks 1 and 2, Vale, proposed building a new railway similar to the disused alignment. In 2013, a mining infrastructure plan developed by the World Bank, Nodalis and others also recommended a rail along a similar alignment.

Map above: Conakry to Mamou railway (in green) and disused Mamou to Kankan railway alignment (in red) by author extrapolated from Google Earth, background map by Google Earth

A new railway between Mamou and Kankan makes sense and would be well received by the regional communities - the President's public comments reflect that. The corridor is well populated, a legacy of the disused railway and the existing N1 highway. There is a string of important regional towns, each with well-developed socio-economic relationships between the urban, peri-urban and rural areas.   After the railway fell into disuse, the only way for these populations to move along this corridor was the N1. Despite an ongoing major upgrade between Kindia and Dabola, the route between Dabola and Kankan is in poor condition making travelling in the wet season a time-consuming ordeal. Local newspapers regularly publish headlines lamenting the state of the highway.

From a regional development perspective, a railway between Mamou and Kankan could unlock significant economic potential. There are many ways to assess this, but let’s use a simple metric – does it connect as many people to markets as possible. Using satellite imagery and GIS spatial analysis we can compare the two corridors’ proximities to population centres.  

Image above. 2012 Rio Tinto alignment (in white) and Conakry to Kankan alignment (in green). GIS analysis and base map by Geo Terra Image.

Using GIS proximity analysis, we can estimate the populations within 5 kilometres (approximately a one-hour walk) between the Kankan to Mamou disused section, and the Simandou to Mamou section of the 2012 Rio Tinto alignment. 

Population proximity analysis by Geo Terra Image, chart by the author.

The GIS analysis show approximately 75,000 people are living on or near the 2012 Simandou South to Mamou section, contrasting with approximately 525,000 people living near the disused section. The latter has seven times the population of the Rio Tinto alignment. A new railway on the rehabilitated alignment would physically and economically reconnect a large population of people west to Conakry and east to Burkina Faso, and potentially north to the gold mining prefecture of Siguiri.   

The problem is the disused Mamou to Kankan route is not feasible for a two-kilometre long 30,000 tonne ore train. It was built for a narrow gauge train traversing over mountainous terrain with a variety of elevations and tight turns. An iron ore train needs a level alignment and wide turns. But the president has made public his request to mining companies for a railway connecting Mamou and Kankan. As Rio Tinto's 2012 southern alignment doesn't do that, what is his expectation? What are the expectations of the regional communities who want this alignment? Who will fund it? Will the road upgrades to Dabola, to be finished in 2022/2023, be sufficient to meet expectations? If mining companies don't deliver a railway, what will the fallout from President's and regional communities' unmet expectations?

The politics of a trans-Guinean railway will require a very careful and time-consuming navigation between the Government and the regional communities, and the mining companies and the Government.

Business risk - mining mega-projects and mass internal migration.  

I turn my attention now to non-technical and non-commercial risks.

Let's assume a scenario where the technical, commercial and political challenges are surmounted and agreement on the configuration of the mega-project is achieved. Simandou, after 23 years of tortuous impasse, is ready to go. The Government and the mining companies publicise the news that all agreements are in place and construction is about to commence. Public expectations skyrocket.

This is the moment when a significant socio-economic risk usually emerges for a mega-project like Simandou. That risk is a massive inward migration of people to the mines, the railway alignment and the ports. Host community populations will surge in size with the arrival of thousands of people from all over Guinea and ECOWAS countries, triggered by the anticipation of economic opportunities stemming from the biggest high-profile mining mega-project on the African continent in decades.

This type of irregular migration is called "project-induced migration", or "influx" but most commonly "in-migration". In-migration is the rapid movement of thousands of people from economically lagging regions to those which are economically progressive.  If managed thoughtfully it has significant and sustainable economic benefits. Usually it isn't, so the consequences are acute adverse economic, environmental, social and health impacts.

I have spent 10 years studying the phenomenon, and have observed it first-hand at mining mega-projects in sub-Saharan Africa, Indonesia, Mongolia and Latin America. If I did an assessment of in-migration risk at Simandou, I would put it in the “is already happening” probability row and the “extreme adverse reputational and commercial costs” consequences column. I consider it the number one social risk of the Simandou mega-project, comparable in significance to the loss of chimpanzee and other critical habitats.

There is much evidence connecting large-scale investment in mining mega-projects with rapid population growth and extreme adverse reputational and commercial costs - the Grasberg mine in Indonesia springs to mind.

 "(T)he Grasberg Mine in the province of (Papua) in Indonesia...offers strong insight into the potential risks associated with (mining) mega-projects. For example, population growth.... has proven to be one of the most important consequences of the economic activity created by the Grasberg Mine"*

Some may feel drawing a comparison with what happened at Grasberg with what could happen at Simandou is questionable, that the geographical and political contexts cannot be compared, that a Grasberg-type in-migration outcome is very unlikely. I would counter that Simandou has some characteristics in common with Grasberg. Simandou is a private-sector-led mega-project in a low-income resource-rich country with a strong centralized government and a weaker regional presence. Like Grasberg, it is located in a remote, sparsely-populated and undeveloped region. Guinea and the surrounding ECOWAS countries have a highly mobile, low-skilled population suffering high levels of poverty, similar to West Papua. Simandou will require large construction and operation workforces. Its construction zones have negligible industries or businesses that could supply goods and services to a standard required by a mining company, so they will need to imported. All very comparable to Grasberg.

The Guinea Government, mining companies and their lenders would contend that this is 2020, that ESG considerations are a much higher priority than they were during Grasberg's development. They now have in place a wide range of regulations, policies, international standards, procedures and programmes that de-risks Simandou being overwhelmed by in-migration - predicting a Grasberg-type outcome therefore seems unwarranted and a little alarmist.

My reaction: I have already seen serious in-migration to a mining zone in Guinea where these very same regulations, policies, procedures, international standards and programmes were already in place - and they didn't seem to have the desired effect. I refer to the 2015 - 2018 Guinea bauxite boom.

The Guinea bauxite boom and in-migration

Shortly before 2015, SMB Winning, (the same companies that were awarded the Simandou North concession in 2019), arrived in the bauxite mining prefecture of Boké and delivered its US$300 million mine and port in record time. Shortly after, the state bauxite mining company CBG committed to a US$1.5 billion expansion programme, while the Guinea Alumina Company, GAC, emerging out of a three-year mothballing and a protracted restructuring, announced its intention to proceed with a US$ 1.4 billion mine, rail upgrade and port. 

By 2015, Boké prefecture was ground zero for a massive mining investment of over US$3 billion. 

The investment triggered an influx of 56,000 people to Boké prefecture’s four main towns, and thousands more to the rural villages and hamlets next to the mines and haul roads. They were seeking direct and indirect economic opportunities from the expanding mining sector.

The population of Kamsar, where CBG and GAC have co-located ports, increased by just under 30,000 people.         

Image above: Population growth in Boke prefecture towns between 2015-2018 owing to in-migration. Data from "Stratégie pour un développement durable de la préfecture de Boké", by Ergo Strategy et al, chart by the author.

The population increased 120% in some Kamsar districts. Most districts in all four towns experienced growth rates well above the Guinean average growth rate, particularly those districts nearest near mining operations.  

Image above: Population growth owing to in-migration in a selection of districts between 2015-2018. Data and chart from "Stratégie pour un développement durable de la préfecture de Boké" by Ergo Strategy et al.

Peri-urban areas were particularly vulnerable to unregulated and informal land uses. 

Informal land use on the urban periphery in Boké prefecture, 2018. Photo by the author.

It could be argued that the in-migration was linked to the free electricity and water that CBG provides its employees and local communities in Kamsar and Sangarédi, systems that now support thousands more than intended via unauthorised connections. But the impact of uncontrolled in-migration could be seen in towns where there are no free utilities. Urban land uses in the town of Boké, the capital of the prefecture, increased by 33% in just under three years between 2015 and 2018. In Kolaboui, the town nearest SMB Winning's port and mine, the population increased by over 60%.

Increase in urban land uses in the town of Boké 2015 - 2018. Existing population 2015 (in grey), and increases in 2016 (in red), 2017 (in orange), and 2018 (in pink). GIS processing and image by Geo Terra Image.

The prefectural and sub-prefectural authorities did not have the technical capability or resources to manage. By 2017, the regional host communities had diminished tolerance for the significant and negative environmental and social impacts from both mining and in-migration it had triggered. They complained that they had to endure the negative and adverse environmental and social impacts without sharing in the prosperity. Social discontent and violence erupted across the prefecture, mining operations had to shut down temporarily and government buildings were damaged.  

Photo courtesy of Reuters.

The Boké bauxite boom in-migration was not a once-off aberration. I have a high level of confidence that it will happen at Simandou, and at a much larger scale. Guineans and citizens from ECOWAS countries will migrate in large numbers, attracted by the economic opportunities flowing from a US$30 billion investment, ten times the scale of the investment in Boké and equivalent to almost three years of Guinea's annual GDP.

Image above - data from public sources and the World Bank, chart by the author.

The investment will fuel a massive in-migration to Simandou mines, ports and at key nodes along the railway such as towns with passenger stations. The scale of the influx will be far higher than the 60,000 in-migrants to Boké. If left unmanaged and the Government, mining companies and regional communities are unprepared, a reasonable best-case scenario is an influx in the low hundreds of thousands. The reasonable worst-case scenario is a number in the mid-hundreds of thousands.

What will be the consequences? My experience with in-migration suggests that the most common ones will be high-density populations living in unsanitary, unplanned, informal settlements; unsustainable pressure on host community assets such as good-quality agricultural land; large increases in social and gender-based violence; a spike in HIV/Aids infections; hyperinflation in the cost of food and housing; overwhelmed local services; loss of traditional authority structures and pervasive levels of social discontent and protest. All of this would happen at a prefectoral-scale, not just in proximity to mining infrastructure.

Earlier this year, IFC commissioned a detailed assessment of the cumulative environmental, social and economic impacts of the Boké bauxite boom at prefectural scale. I am certain it will reveal that while Government revenue has surged, the environmental and social conditions at ground level for some of the prefectoral communities have worsened considerably. I await the publication of report findings, it should signal what could be expected at Simandou, but on a much greater magnitude.

Could the scale of in-migration be managed and is it possible to prepare the Government authorities, the mining companies and the host communities to absorb the surge in population? In a 2012 research report for a large development bank, I observed that "there are a host of possible interventions that can be incorporated into the overall spatial strategies and policy frameworks (to manage mass in-migration)... these can be achieved, inter alia, through incorporating meaningful stakeholder engagement at all levels, providing utilities and community facilities and opportunities for economic engagement at a regional rather than a local scale, and finally through the provision of land use controls and development guidelines”.

These recommendations, based on exhaustive case studies of mining mega-projects in low-income countries, were the beginnings of what I now call a collaborative regional development policy. It was the starting point for a six year process that would culminate in the Ministry of Mines in Guinea commissioning the “Sustainable Development Strategy for Boké Prefecture”. This is the template for what could be done at Simandou.

A collaborative regional development policy for Simandou

If you ask the question in Guinea “who is responsible for regional development” or "who should manage regional-scale in-migration?", (and I have, many times) you will get three typical answers. The Government will say “the mining companies”. Mining companies will insist that it’s “the Government”.  The regional communities will say “the Government and the mining companies”.

Most mining executives will argue, understandably, that their company’s role is to mine, not roll out regional development - that’s a Government’s responsibility. I agree - but only if we are talking about the US, Canada, Australia and other high-income resource-rich country with high capacity technical capability and a robust regulatory and governance regime. I don't agree if we are talking about low-income resource-rich countries like Guinea. 

Here is the rationale. Guinea has a private-sector-led mineral development policy, a legacy of the approach advocated by the development banks and institutions in the 1990s. The consequences of these reforms in Guinea were largely successful, but there were some downsides:

“ (The) strong retrenchment of the state from the mining sector, accompanied by parallel processes that redefined its role while reducing state sovereignty …diminished state power and capacity…by reducing both resources and institutional capacity…radically shifted power and authority from state to private actors, thereby redefining relations between elites and communities. These shifts have contributed to a reduced institutional capacity to enforce regulations and, consequently, the norms essential for developing and protecting the environment have also weakened” **  

The Boké bauxite boom illustrates the point. 

The Government of Guinea, and the regional and prefectural authorities were not in a position to manage the environmental, social and economic impacts of a US$3 billion investment surge. They didn’t have the technical capacity to direct and manage the process or the institutional capacity to enforce regulations. These roles, in simplistic terms, were delegated to the mining companies via the requirements of the 2011 mining code; the mining development agreements; social, environmental and influx management plans approved under the ESIA process; conditions imposed on the mining companies by their lenders to comply with the Equator Principles; and ESG commitments made voluntarily by the mining companies as part of their CSR policies. But the environmental and social consequences of the Boké bauxite boom proved that they are not as effective at a regional scale as they should be. Clearly, something extra is needed. 

That something extra is a collaborative regional development policy. It is not a replacement of the regulations, policies, international standards, procedures and programmes that de-risks Simandou, but a logical extension from project-specific to region-wide.

Collaborative regional development (CRD) is not a new concept. Anglo American, a mining major who has adopted the approach, has been rolling out CRD initiatives in South Africa and Peru for a number of years. And CRD is already becoming established in Guinea. GAC, in Boké prefecture, has a CRD approach to managing in-migration on its concession and in the local towns. Anglo African Minerals has committed to embedding a CRD approach in the development of its Central Guinea bauxite projects.

The essential core of a CRD policy is a shared vision for sustainable development. This requires the creation of a partnership between the national Government, the local authorities, the mining companies, and representatives from all parts of the regional communities. A true collaborative partnership means putting in place: 

• a formal multi-stakeholder engagement forum that facilitates understanding of the nature of social and economic interactions in the region and how they will be managed and by whom;
• spatial development frameworks and action plans to address project-level and regional-level challenges and guide responses to emerging problems during construction and operation;
• an institutional architecture with ministerial oversight, day-to-day governance, operation and execution functions;
• mechanisms to identify and respond to rapid disruptive trends in the regional economy;
• a strategy which articulates how the footprint of project benefits to the regional community will be maximised;
• an agreement that connects the interests of the mining sector with the intentions of government and other key stakeholders for regional development;
• a collaboration strategy between competing projects on issues of mutual interest and benefit.

This approach has already been successfully road-tested at prefectural scale in Guinea. 

In 2018, the Guinean Ministry of Mines & Geology commissioned the “Stratégie pour un développement durable de la préfecture de Boké“, the Boké Prefecture Sustainable Development Strategy. The Strategy was the Ministry’s response to resolving the environmental and social consequences of the Boké bauxite boom. It was financed by the World Bank and supported by bauxite mining companies GAC and CBG. I acted as the Ministry's technical adviser on regional development and wrote the terms of reference in collaboration with Marie-Joséphine Nsengiyumva, who at the time was seconded to the Ministry by the Natural Resource Governance Institute. The terms were based on the CRD principles I had developed in the 2012 research report, with important contributions from colleagues Renee Hallam, Tony Kneuker, and Derek Chittenden.

The foundation of the Boké Strategy was an exhaustive six-months of stakeholder engagement. Dozens of meetings with key government ministries, mining companies, prefectural and sub-prefectural authorities, civil societies, and community representatives were held in Conakry and the main prefectural towns. 

Image above: Stakeholder engagement round table, Boke town, September 2018. Photo by the author.

The Strategy included a comprehensive analysis of the infrastructure and private assets in the prefecture, an assessment of the impact of the mining industry, and, importantly, an assessment of the potential for socio-economic growth across a range of non-mining sectors. The output was a shared vision expressed as a concept spatial development framework, the preferred scenario for future sustainable development.

Image above: Conceptual development framework for Boke prefecture, "Stratégie pour un développement durable de la préfecture de Boké", 2019 by Ergo Strategy et al, commissioned by Guinea Ministry of Mines & Geology.

The framework had five key structures, designed to be mutually supportive.

Image above: Information extracted from "Stratégie pour un développement durable de la préfecture de Boké" by Ergo Strategy et al, infographic by the author.

It recommended organization principles and an institutional structure with ministerial oversight through a steering committee to coordinate decision-making, stakeholder engagement, execution, and delivery.  A management unit will then oversee the creation of detailed development plans and identify the priorities for investment projects.

Image above: Infographic from "Stratégie pour un développement durable de la préfecture de Boké" by Ergo Strategy et al.

One of the most important findings of the the Strategy was that the mining sector could catalyse new industries such as agriculture, forestry, fishing, livestock management and industrial services, contributing an additional US$ 670 million to the national economy that would continue long after mine closure and employ far more people than the mining sector.

Image above: Infographic from "Stratégie pour un développement durable de la préfecture de Boké" by Ergo Strategy et al.

I learnt two key lessons from my involvement in the Boké Strategy:

Lesson number 1. The Strategy should have been in place well before the bauxite boom. To maintain positive relationships with the regional community and prevent reputational harm, a comprehensive population influx management plan as part of a regional economic development plan spatial and aspatial solutions have to be in place before a project inception. Critical to success of these solutions is the need for buy-in of stakeholders.

Lesson number 2. Collaboration means giving up control and adapting to the time needed to develop a CRD policy and a shared vision. Governments need time to accept shared decision-making and governance. Mining companies are generally fast-moving well-organised organisations under pressure to deliver projects and manage their costs and risks effectively. They need time to adapt to the culture shock of navigating complicated relationships and engaging with communities who vehemently oppose what they are doing. Regional communities are full of entrepreneurial people with great ideas, but they need time to acquire the skills to contribute and collaborate effectively.  Don’t underestimate their ability to make valuable and meaningful contributions to a shared vision. 

The better way forward for Simandou

In this article I discussed and illustrated some key technical, commercial and political challenges that need to be resolved. Assuming they can be, then the Simandou mega-project faces the significant business risk of massive in-migration. I have advocated a policy of collaborative regional development as a way of not only managing this risk, but to deliver sustainable socio-economic benefits to the regional communities.

There are some immediate actions worth considering by the key stakeholders:

• The Ministry of Mines has formed a committee to oversee and coordinate the development of the four Simandou blocks, a good move by the Minister of Mines Abdoulaye Magassouba. The committee may wish to examine how a Simandou CRD policy could be rolled out urgently, given the commercial pressures on the mining companies;
• Formation of a formal multi-stakeholder engagement forum and the institutional architecture needed to execute a CRD policy have long-lead times and therefore should be put in place as soon as possible;
• A Simandou CRD policy needs to be in place well before any construction begins. In 2012 - 2014, Rio Tinto's economic development team developed a number of conceptual regional development strategies for the Simandou mine and port. This work could be urgently revived and significantly scaled up by the Government and the mining companies, using the Boké Prefecture Sustainable Development Strategy as instructive guidance;
• Any future environmental and social management plans for both Simandou North and South, including influx management plans, should be coordinated with the CRD Strategy and not just be focused at interfaces with local communities.

A CRD approach can be done in Guinea and it would be strongly supported by all shareholders. It will allow the Government, the mining companies and the regional communities to embrace a collaborative approach, a mechanism for their collective needs and aspirations to be incorporated into the sustainable development of a new mega-project region.

A collaborative regional development policy is the better way forward for Simandou.

?References.

*"The Grasberg Mine of Indonesia" Anabel Taylor Hall, Centre for Transformative Action, Cornell University (n.d)

** "Neoliberal reform, contestation and relations of power in mining: Observations from Guinea and Mongolia" Bonnie Campbell and Pascale Hatcher, 2019

All information and data used in this article are in the public realm. The opinions expressed are the author's.